Economic woes extend to Second Life

Everywhere you look, it seems there's news of some real life business jumping into the virtual world of Second Life. Carcompanies, HR firms, clothing makers; you name it, it was being sold on the virtual frontier. But, as PRI's Marketplace reported earlier this week, many businesses are having trouble turning their virtual storefronts into real money.

Despite the relatively low overhead costs of operating a Second Life business, companies like Starwood Hotels, AOL and Wells Fargo have been leaving their digital outposts in recent months. The problem of marketing to avatars was effectively summarized by reporter Janet Babin as "too many 7-foot-tall winged creatures flying around with no need for American Apparel's cotton T-shirts."

Meanwhile, the Wall Street Journal is covering a Second Life banking scandal that could rival the sub-prime mortgage crisis for SL citizens. It seems some questionable banking schemes has led Linden Labs to shut down over a dozen virtual banks, causing a run on funds over the past few weeks. Makes us glad we kept our Linden Dollars under the virtual mattress.